Arch Mortgage Insurance Company (Arch MI), the U.S mortgage insurance arm of Arch Capital Group, has secured a further $506.11 million of indemnity reinsurance from the capital markets via an insurance-linked securities (ILS) transaction with Bellemeade Re 2018-3 Ltd., a special purpose reinsurer.
The reinsurance relates to a portfolio of mortgage insurance policies issued by Arch MI and its affiliates during the first half of 2018, and marks the third time this year that Arch MI has accessed the capital markets for a risk transfer involving a mortgage insurance portfolio.
Arch MI previously secured $375 million of reinsurance through an ILS transaction in April 2018, and $653 million through a second transaction in August.
These three transactions have garnered $1.534 billion of reinsurance protection for loans representing more than $136 billion of unpaid principal balance.
“Completing our third ILS transaction of 2018 demonstrates our appetite to continue leveraging reinsurance protection to manage our regulatory capital position,” said Andrew Rippert, Chief Executive Officer (CEO) of Arch’s Global Mortgage Group.
“We continue to be pleased with the investor interest in these structures and look to expand the investor base moving forward,” Rippert added.
Bellemeade Re 2018-3 Ltd. is funding its reinsurance obligations through the issuance of four classes of amortizing notes with 10-year legal final maturities. The most senior M-1A class notes received an A rating from Morningstar Credit Ratings, LLC.
